Insurers are expected to pay out nearly £500 million for claims made due to storms Dudley, Eunice and Franklin, which battered much of the UK in February, according to the Association of British Insurers (ABI).
According to ABI’s figures, a total of 177,000 claims were made for damaged homes, businesses and vehicles, leading to an estimated overall payout of £497 million. Of these claims, 169,500 were related to property damage, costing £473 million. Meanwhile 7,522 claims were made for damaged vehicles, amounting to £23 million.
Additionally, emergency payments to provide immediate relief accounted for £13 million of the estimated total, while the arrangement of temporary shelter for policyholders amounted to £2.2 million.
“Storms and floods are exactly the type of unwelcome event that insurance protects against,” said Sarah Brodie, senior policy adviser in general insurance at ABI. “When bad weather strikes, the priority for insurers is always do all they can to help their customers recover from what can be a traumatic and costly experience as quickly as possible.”
Allianz Commercial’s head of property claims, Rebecca Rogers, said that the company was “well prepared” to cover these costs, having been able to roll out a simplified process for storm claims thanks to “precise geospatial forecasts.”
“[In] the most affected locations, we proactively liaised with brokers so they knew which information we needed to handle the claim from the first notification of loss (FNOL),” Rogers said. “That’s our one-touch settlement approach and we’re very grateful for brokers who’ve supported this, as it made a big difference in how quickly our customers have been able to recover.”
Still, considering the growing frequency of extreme weather events due to climate change, Rogersacknowledged the necessity of pursuing a sustainability agenda within the insurance industry.
“In property claims, that means using green methods of reinstatement and encouraging customers to access flood resilience grants, for instance,” Rogers said. “As a business, we’ve been looking at our own operations and at our supply chain. As well as powering our UK offices with 100% renewable energy, we’ve rolled out a sustainable procurement charter that prioritises suppliers who take ESG seriously and we’ve set up the Allianz Net Zero Accelerator to help independent brokers measure, reduce and offset their emissions.”
In 2021, ABI released a climate change road map, detailing plans to forward the industry’s climate change commitment.
“The Environment Agency projects that winter rainfall could increase by between six and 13%, while the sea level rises by at least 23cm – at a time when the number of properties on flood plains is projected to double. The scale of this challenge demands that we maintain our sector’s focus on Net Zero and delivering our Climate Change Roadmap,” said Ben Wilson, ABI’s director of corporate affairs and climate change.